EC launched a consultation for the new climate change adaptation strategy, the comment period for which ends on August 20, 2020. The plan is to put forward this strategy in early 2021, as part of the European Green Deal. This adaptation strategy will build on the strategy that was adopted in 2013. EC also published the results of the new project on Projection of Economic impact of climate change in Sectors of the EU, based on the bottom-up Analysis (PESETA).
The European Green Deal aims to make Europe the first climate-neutral continent in the world. The new adaptation strategy should continue and expand on the ongoing efforts. As part of its Green Deal, EC launched this strategy to help the EU adapt to the effects of climate change, by focusing on encouraging investment in eco-friendly solutions, climate-proofing the economy, making key infrastructure more resilient, adding climate factors to risk management practice, and stepping up prevention and preparedness. Throughout EU and the globe, it will be important that investors, insurers, businesses, cities, and citizens are able to access data and develop instruments to integrate climate change into their risk management practices.
The new adaptation strategy should continue and expand on current efforts. The policy actions to be continued and expanded as under the 2013 Strategy include:
- Further mainstreaming and integrating adaptation in EU legislation and instruments.
- Continuing to support, monitor, and share member state adaptation action and goals, including through the Climate Law, via Climate-ADAPT, reporting under the National Energy and Climate Plans and the Energy Union Governance Regulation, and through regular exchanges
- Closing further gaps in adaptation-relevant knowledge through the regular programming of research and innovation activities under Horizon 2020 and its successor, Horizon Europe as well as through trends and forecasts
- Financially supporting adaptation actions, including cross-border inter alia through continued support from EU funds
- By fostering and incentivizing private investment in adaptation in relation with the Renewed Sustainable Finance Strategy and the EU taxonomy (the first Taxonomy Delegated Act will focus on climate change mitigation and adaptation).
The new adaptation strategy should also tackle new priorities. The additional priorities that the EU could pursue toward climate-resilience, in full synergy with the other strategic initiatives announced in the European Green Deal, include more and better data, deeper knowledge and faster deployment of solutions, closing the climate protection gap, preventing damage to infrastructure and beyond, and reinforced global action for climate resilience. Overall, efforts to measure (increased) resilience to climate change need to be continued and upgraded and linked to a more ambitious monitoring and evaluation system. What could be envisioned is the development of relevant indicators that help measure progress and that are more comparable across countries; for example, in case of similar types of climate hazards and related adaptation actions and policies.
The 2013 strategy relied on a scoreboard to assess preparedness; the new strategy could use a dashboard to assess resilience and subsequently monitor the trend over time, with regular progress reports on specific targets. Strengthening effective monitoring and evaluation tools for adaptation policies and measures in partner countries will continue to be of central interest in EU’s international action and support.
Comment Due Date: August 20, 2020
Keywords: Europe, EU, Banking, Insurance, Securities, European Green Deal, Climate Change Risk, ESG, Sustainable Finance, Adaptation Strategy, EC
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards
The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.